Specialists Thomas Facchine, Peter Giacchi, and John Parisi, left to right, look at thier screens on the floor of the New York Stock Exchange Thursday, Feb. 28, 2013. The stock market pushed higher Thursday afternoon, sending the Dow tantalizingly close to a record high. (AP Photo/Richard Drew) ORG XMIT: NYRD117 / Richard Drew AP

by John Waggoner, USA TODAY

by John Waggoner, USA TODAY

February's employment report is good news for stock investors, but an early warning for bond investors to throttle back.

The economy added 236,000 jobs in February, vs. 160,000 predicted by economists. At 7.7%, the unemployment rate still isn't low enough for the Federal Reserve to start raising short-term interest rates, or cut back its program of buying bonds to keep long-term interest rates low.

Nevertheless, the improving jobs picture will help consumers shrug off the increased payroll tax, which kicked in Jan. 1, says Scott Anderson, chief economist for the Bank of the West. "It seems like the economy is in a relative sweet spot," he says.

The stock market likes to see an improved economy: More people at work means more people to buy goods and services. And the unemployment rate isn't low enough yet to put pressure on wages, keeping profit margins fat.

As the employment situation improves, however, it increases the likelihood that the Fed may end its easy money policies sooner rather than later. The Fed's low rates have helped consumers refinance their debt, putting money in their pockets. And gains in stock and bond mutual funds help consumers feel a bit wealthier -- which, in turn, makes them more inclined to spend.

For the pessimistic bond market, Friday's jobs report was bad news. Traders pushed up the yield on the bellwether 10-year Treasury note to 2.07% -- historically low, but higher than recent levels. Bonds and bond funds rally on bad economic news: A slowing economy or a recession means interest rates will fall and bond prices rise.

If you own a bond mutual fund, you might feel a bit of a pinch. As rates rise, bond prices fall. Investors poured $331 billion into bond funds the past 12 months, while yanking $97 billion from stock funds.

The rise in the 10-year Treasury note yield "means that things are not as bad as the bond market was predicting," says Mike Dueker, chief economist at Russell Investments. He's expecting sustained monthly job growth of 200,000 through this year, but warns that the next few jobs reports might not be as positive, thanks the government's fiscal tightening.

Is inflation in the air? "I wouldn't go that far," says Anderson. "We need to get below a 6% unemployment rate, and we're not there yet.": The huge number of discouraged workers -- those who have stopped looking for work -- will slow the fall of the unemployment rate. As more jobs become available, the pool of job-seekers will increase.

Nevertheless, if you're banking on interest rates falling, the economy weakening, and your bond fund soaring, you may need to rethink your strategy.